- The DXY is moving within a range issue below 93.00.
- US 10-year yields are moving lower from Friday’s highs near 1.30%.
- New Home Sales, The Dallas Fed Index Is Next On The US Calendar
The dollar, in terms of US Dollar Index (DXY), alternates profit and loss at levels just below 93.00 earlier in the week.
FOMC-Centered US Dollar Index, Data
The index begins the week with a negative base after two consecutive weekly advances supported by the best tone in the space associated with risk.
Falling US yields also contribute to the soft tone offered in the dollar, as market participants continue to absorb Friday’s PMI flash readings, where the manufacturing sector extended optimistic momentum in the face of the unexpected fall in the service indicator.
Moving forward, the dollar is expected to tread water in the next two sessions before the FOMC key event to be held on Wednesday along with the release of important data.
Later in the American session, new home sales will get all the attention seconded by the Dallas Fed index and the 2-year yield auction.
What to look for around USD
The DXY continues to trade at the upper end of the monthly range near 93.00, although it has not yet closed above that level on a daily basis. The index is expected to enter a consolidation phase ahead of the FOMC key event on Wednesday. Meanwhile, bouts of risk aversion in response to coronavirus concerns, the strong pace of the economic recovery, high inflation, and prospects for a gradual QE reduction / rate hikes earlier than expected are factors that they support a higher rise in the dollar in the short term.
Technical levels
Now, the index is losing 0.10% at 92.81 and faces the next support at 92.46 (23.6% Fibonacci from November to January rally) followed by 92.00 (July 6 monthly low) and then 91.51 (June 23 weekly low). ). On the other hand, a breakout of 92.72 (monthly high on July 21) would open the door to 93.43 (high on March 21, 2021) and finally 94.00 (round level).
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